Consumer Behavior Income and Social Class MKT 442

Transcription

1 Consumer Behavior Income and Social Class MKT 442 Consumer Spending and Economic Behavior General economic conditions affect the way we allocate our money A person s social class impacts what he/she does with money and on how consumption choices reflect one s place in society Products as status symbols Income Patterns The average American s standard of living continues to improve due to: An increase of women in the workforce Increases in educational attainment Discretionary Spending Discretionary income Americans spend a much larger share of budget on shelter and transportation, and less on food and apparel Households are spending more now on entertainment and education Individual Attitudes Toward Money Seven distinct types of money personalities (see Table 13.1): Hunter Gatherer Protector Splurger Striver Nester Idealist Money = success/failure, social acceptability, security, love, or freedom Money-related disorders Atephobia (fear of being ruined) Harpaxophobia (fear of robbers) Peniaphobia (fear of poverty) Aurophobia (fear of gold) Consumer Confidence Behavioral economics/economic psychology Consumer confidence: the extent to which people are optimistic or pessimistic about the future health of the economy Influences how much discretionary money we will pump into the economy Overall savings rate is affected by: Pessimism/optimism about personal circumstances World events Cultural differences in attitudes toward savings A Universal Pecking Order

2 Dominance-submission hierarchy Pecking order: relative standing in society Standing determines access to resources Education, housing, consumer goods We try to improve our standing by moving up social order whenever possible Marketing strategies focus on this desire to move up in standing Social Class Affects Access to Resources Divisions of society in terms of social and economic resources Marx: position in society = one s relationship to means of production Control of resources vs. dependence on own labor for survival Weber s rankings: status groups, party, and class Social Class Affects Tastes and Lifestyles Social class: overall rank of people in society Those in same social class work in similar occupations, have similar lifestyles, socialize with one another, share ideas/values, marry each other (homogamy) Social class is a matter of what we do with our money and how we define our roles in society Social Stratification Social arrangements in which some members get more resources than others by virtue of relative standing, power, or control in the group Artificial divisions in a society Scarce/valuable resources are distributed unequally to status positions Achieved vs. ascribed status Status hierarchy Class Structure in the U.S. Class Structure Around the World Rise of Chinese middle class Nike s new brand presence there Japan as a status- and brand-conscious society Single, working women spending on luxury goods Major retailers/brands are coming to Middle-Eastern countries, where Arab women enjoy shopping with their families/friends

3 England s rigid class structure still exists, but the dominance of its aristocracy is fading Marketers are targeting chavs interest in fashion, food, and gadgets The Rise of Mass Class Income distribution Affordable luxuries within reach of many consumers Rising incomes + decreasing prices Marketers cater to mass class with high-quality products Social Mobility The passage of individuals from one social class to another Horizontal mobility Downward mobility Upward mobility Differential fertility Cinderella fantasy Components of Social Class Occupational prestige Is stable over time and similar across cultures Single best indicator of social class Income Wealth is not distributed evenly across classes (top fifth controls 75% of all assets) Income per se is not often a good indicator of social class; it s the way money is spent and not how much is spent Relationship Between Income and Social Class Money and class are by no means synonymous Additional wage earners are often of lower status Extra money earned is often not pooled toward the common good of the family More money tends to result in buying more of the usual rather than upgrading to higher-status products Income is better predictor of major nonstatus/nonsymbolic expenditures Need both social class and income to predict expensive, symbolic products Soci al class is better predictor of lower to moderately priced symbolic purchases Measuring Social Class Social class is a complex and difficult concept to measure Raw education and income measures work as well as composite status measures Americans have little difficulty placing themselves in working/middle classes Blue-collar workers with high-prestige jobs still view themselves as working class Class is very subjective; its meaning speaks to self-identity as well as economic well-being Problems with Social Class Measures Most measures of social class in the past had trouble accounting for two-income families, young singles living alone, or households headed by women Increasing anonymity of our society Reputational method is virtually impossible to implement today (can use demographic data and

4 subjective impressions) Status crystallization Impact of inconsistency on the self and social behavior Overprivileged vs. underprivileged conditions of social class Problems associated with lottery winners Traditional issues of hierogamy Women tend to marry up more than Sexual appeal for economic resources men do Many women now contribute equally to family s well-being Potential spouse s social class as product attribute Problems with Social Class Segmentation: A Summary Marketers tend to ignore: Status inconsistency Intergenerational mobility Subjective social class Consumers aspirations Social status of working wives to change class standing H ow Social Class Influences Purchase Decisions Consumers perceive different products/ stores as appropriate for certain social classes Working class: sturdy, comfortable, and familiar products Affluent people: appearance/body image Diet foods/drinks Class Differences in Worldview World of working class is intimate and constricted Immediate needs dictate buying behavior Dependence on relatives/local community More likely to be conservative/family-oriented Maintaining appearance of home/property Don t feel high-status lifestyle is worth effort Affluenza and pressure to maintain family status Taste Cultures Differentiates people in terms of their aesthetic and intellectual preferences Distinguishes consumption choices among social classes Groupings based on shared tastes in literature, art, music, leisure, and home decoration Codes The way consumers express and interpret meanings Allows marketers to communicate to markets using concepts and terms consumers are most likely to understand and appreciate Marketing appeals constructed with class differences in mind will result in quite different messages Restricted codes vs. elaborated codes Cultural Capital Set of distinctive and socially rare tastes and practices

5 Refined behavior that admits a person into the realm of the upper class Etiquette lessons and debutante balls Taste as a habitus that causes consumption preferences to cluster together Targeting the Poor Poor people have the same basic needs as everyone else Staples/food, health care, rent On average, residents of poor neighborhoods must travel more to have same access to supermarkets, banks, etc. Targeting the Rich Many marketers try to target affluent, upscale markets Affluent consumers interests/spending priorities are affected by where they got their money, how they got it, and how long they have had it Luxury groups: Luxury is functional Luxury is a reward Luxury is indulgence Old Money These types of families live on inherited funds Family history of public service and philanthropy Rockefeller University, Whitney Museum Distinctions made by ancestry and lineage The Noveau Riches The working wealthy rags to riches Newcomers to the world of wealth Status anxiety leading to symbolic self-completion Advertising emphasizes looking the part Status Symbols Keeping up with the Joneses/Satos Often what matters is that you have more wealth/fame than others Status-seeking: motivation to obtain products that will let others know that you have made it Status-symbol products vary across cultures and locales Conspicuous Consumption People s desire to provide prominent visible evidence of their ability to afford luxury goods Invidious distinction Robber barons The Trophy Wife Leisure class and idle rich Wives of wealthy husbands as walking billboards Conspicuous waste